Tuesday, August 19, 2008

The Scarlet Letter

From the Sacramento Bee:

To some analysts, the region's rising sales – mirroring those elsewhere in inland California – suggested a path toward stability that could set in next year.
...
"I think in the Central Valley we're getting closer to the bottom. I still think it's going to be 2009," added Delores Conway, director of the Casden Forecast at the USC Lusk Center for Real Estate in Los Angeles. "But I think prices are bottoming out in Sacramento, the Inland Empire and some areas around Fresno."

Caution abounds, however. Much rides on unemployment, which is rising in California, availability of credit, resets on a new wave of troubled loans and the pending loss of down payment assistance gift programs, analysts said.
DataQuick data via Home Front:
-By County [doc]
-By Zip [xls]

From the Sacramento Business Journal:
The price-per-square-foot of the average house in Sacramento County dropped to $141 and to $191 in El Dorado County, representing an overall regional decline of 33 percent from a year ago, according to Trendgraphix Inc., a real estate data tracking firm connected with Lyon Real Estate. Michael Lyon, CEO of Lyon Real Estate said bank-owned properties make up 63 percent of all sales and the inventory of those properties inventory continues to grow.
From the Sacramento Bee:
The housing market has collapsed. Growth pressures? Poof! Yet Elk Grove – or at least a large number of its council members – still continues the curious push to balloon the city's boundaries. Elk Grove is seeking to expand its "sphere of influence" over 10,536 acres south of the city, including parts of the Deer Creek and Cosumnes River floodplains.
...
Why this push? Why now? It's hard to say. There's no immediate need for Elk Grove to add rooftops. The city has scores of empty houses. What Elk Grove needs is new jobs, centrally located, so the city can evolve into a real city.
From the Modesto Bee:
The Modesto Bee offered buyouts Monday to all its full-time employees. The announcement comes four days after The McClatchy Company, which owns The Bee and 29 other daily newspapers, announced a companywide one-year wage freeze. "Unfortunately, the economy continues to worsen, and we must reduce expenses further," Publisher Margaret Randazzo said in an e-mail to employees. This is the second buyout The Bee has offered employees this year.
...
These actions follow last month's announcement that The Bee will cease printing in Modesto...That change will cost 33 full-time employees and 127 part-time employees their jobs.
A bit of déjà vu courtesy of InsideBayArea.com:
As the mortgage meltdown forces more homes into foreclosure in the Bay Area, some of these properties are being picked up by investors who are putting them back into the rental market...[A]s investors buy foreclosed homes and rent them out, the number of available rental properties is likely to increase, which could lead to lower rents down the road, observers say.
...
"We are starting to see a trend. Investors are picking up the homes and turning them into the rental market right away. ... We have not seen the foreclosures drive up rents anywhere right now" [said Eric Weigers, deputy director of the California Apartment Association.]...Foreclosure activity involving investors who are turning the homes they buy into rentals is indeed increasing the rental stock, said Steve Edrington, executive director of the state Apartment Association's northern Alameda County chapter..."I think we are in this transitional point where rents are going to slow down and sales of houses are going to pick up a bit because there is less inventory out there," he said. "The (foreclosed) homes are being bought and rented out and not being sold for owner-occupancy."
From the Stockton Record:
Stockton City Council tonight will consider an ordinance that will require vacant homes and other empty buildings to be posted with 24-hour contact information for the owner or local property manager on a street-facing, weather resistant, 4” x 6” sign. “Stockton has become a center for the foreclosure crisis,” says City Manager Gordon Palmer. “Our code enforcement officers have had a significant increase in the number of cases they are handling. This ordinance will help us quickly determine who the property owner or manager is and work with them to resolve problems and concerns before they deteriorate.”

7 comments:

smf said...

"The (foreclosed) homes are being bought and rented out and not being sold for owner-occupancy."

Where have I heard that being said before...hmm...sounds familiar.

Comments like that prove once again that this bubble is far from over.

Speculators still have far too much influence in this market.

Sold in '05 said...

This is nice work. The AP Newswire has picked up on the story that Max posted on "Shadow Inventory".

http://www.signonsandiego.com/news/business/20080819-1145-allbusiness.html

Jacob said...

To some analysts, the region's rising sales – mirroring those elsewhere in inland California – suggested a path toward stability that could set in next year.

Those rising sales are mostly foreclosures, and there are still more and more new foreclosures each month. Non distressed sales are almost non existant which suggest we still have more price corrections ahead.

If new foreclosures stopped today it would still take over a year in most places to sell through the backlog.

A bottom in 09 is wishful thinking imo. Tho I certainly hope it happens so I can buy, but 09 is looking worse and worse to me latelt.

bubblemachine said...

I think in the Central Valley we're getting closer to the bottom. I still think it's going to be 2009," added Delores Conway, director of the Casden Forecast at the USC Lusk Center for Real Estate in Los Angeles.

Here's more proof that the so-called experts don't have a clue. How could someone in this position at a major university not know that in 2009 a huge new wave of foreclosures will make 2008 seem like a Sunday School picnic?

Buying Time said...

"USC Lusk Center for Real Estate in Los Angeles"

At least the article quotes more folks without a direct financial stake in the outcome (i.e. local realtors or builders).....I think that's a good start.

Cow_tipping said...

I'm pretty sure "USC Lusk Center for Real Estate in Los Angeles" has plenty to gain from calling bottom today and hoping many more fools jump in to catch their falling knives.
Cool.
Cow_tipping.

Diggin Deeper said...

And Sacramento thought it had RE troubles.

Been watching Fannie and Freddie stocks over the last couple of days...ala Enron. Two weeks ago, Paulson says, there's money in the till for both, but they'd probably not have to use it. What a difference a couple of weeks make...this is serious trouble and will force the Treasury to step up and nationalize these quasi businesses. Once they do, and guarantee their loan portfolios, 100's of $B's could vanish due to lack of risk management(loaded with alt-A, subprime, toxic waste). The Japanese alone hold over a $T in their paper.

And we thought the $300 Billion mortgage rescue plan was the high end....start thinking $Trillions...

Lot's of people are going to get hurt and put further pressure on every RE market in the country.

One night viewing of the movie "IOUSA" tonight in several theatres around town...should be an eye opener.

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